SACP: Yes we’re ‘radical’

Social pacts and “second Codesas” are a Utopian dead end when the real rot in South Africa’s economy is capital flight, says the SA Communist Party (SACP).

The party this week released a discussion paper that tried to vindicate its alliance partner, the ANC’s, new-found attachment to the term ‘radical economic transformation’, which has become the governing party’s calling card since its electoral victory this year.

The paper defends government’s industrial policies as worthy of “radical” and attacks proposals from other quarters as being Utopian or opportunistic.

This includes the DA’s insistence that the Constitution implies liberal economic policies, the Economic Freedom Fighters’ “hybrid right and left wing populist ‘radicalism’” and the rising tide of criticism from the left around the Marikana massacre.

The SACP claims the real “radical” economic transformation is already under way with the New Growth Path, the Industrial Policy Action Plan and the National Infrastructure Plan.

The SACP paper shoots down calls for a second Codesa as “simply Utopian”, saying that people who believe a “gentleman’s agreement” between business, labour and government will solve economic problems do not understand their history.

The basic premise of a “social pact” is that unions restrain wage growth in return for companies using the resulting gains for reinvestment in South Africa, creating a cycle of growth and employment. Everything that has happened since 1994 points in the opposite direction, argues the SACP.

The whole idea is a throwback to how the developed world rebuilt itself between World War 2 and 1973, and ignores the global transformation of capitalism since then, it says.

The “most active factor in deepening South Africa’s triple crisis of unemployment, poverty and inequality” has been the “massive disinvestment” by former South African companies, it adds (see box).

This is “directly responsible” for South Africa’s deindustrialisation and increasing public debt, says the SACP. The exodus did not start in the past five years – it started in the mid-1990s as soon as the restrictions imposed on capital were lifted, adds the SACP.

The call for new Codesa talks focusing on economic issues has been made across the political spectrum, from ANC stalwart Joel Netshitenzhe to Freedom Front Plus MP Anton Alberts.

The SACP paper was released this week by the party’s general secretary and Higher Education and Training Minister Blade Nzimande and his party deputy, Jeremy Cronin, who is also the deputy minister of public works.

It marks the clearest policy statement from the SACP since 2009 when it was the strongest critic of the nationalisation campaign then being driven by the ANC Youth League as partly an attempt by debt-swamped black capitalists to score state bailouts for their mining projects.

This week’s paper accuses left wing activists and commentators who have rallied around the Marikana massacre of “blanket oppositionism and the comfortable ‘purity’ of standing outside” while the alliance gets on with the real work of pushing for radical responses “within the state”.

The SACP then accuses the network of academics producing the current wave of criticism from the left of the ANC of being “entryist”, which implies that they are trying to hijack a popular movement.

SACP backs ANC on radical economic transformation and shoots down calls for a second Codesa, slamming it as ‘Utopian’

Flight out of SA

Whatever happened to monopoly capital?

The SACP’s answer to capital flight involves a “relative delinking” of South African society from the global economic system. This seems to mean an ultrastrict exchange control regime that will prevent South African capital from seeking greener pastures without a quid pro quo.

In the 1990s, many of the major South African conglomerates moved to London or started to invest their money outside South Africa.

This includes Anglo American, the former Gencor, Old Mutual, SA Breweries, Dimension Data and Investec.

The SACP praises as “correct” the SA Reserve Bank’s recent setting of conditions on AngloGold Ashanti’s plan to split its local and international mines into two separate companies.

The conditions led to the deal falling through because large shareholders refused to foot the bill in a $2?billion (R21.8?billion) rights issue.

Sasol’s announcement this week that it was going ahead with its gargantuan $8?billion investment in Louisiana in the US was presented as a case in point.

The petroleum and chemicals giant was built with public funds and was, in effect, subsidised by the South African public since the 1940s by being allowed to sell its synthetic oil made from coal at the price of imported oil.

Sasol warded off a Treasury proposal that it pay a windfall tax in 2006 with promises to build South Africa a new coal-to-liquid plant, the Mafutha project, in Limpopo.

But Mafutha was canned while the megainvestment in the US is going ahead.

The recent acquisition of agriculture group Afgri by a US private equity group as well as the acquisition of Absa by Barclay’s are also highlighted as examples of the rot at the heart of South African capitalism.

Delink the poor from the labour market

Another part of the SACP’s solution to structural unemployment is to “delink” poor people from the labour market by growing the Expanded Public Works Programme (EPWP) into the beginnings of a “solidarity economy”.

The EPWP is run by the SACP’s deputy general secretary, Jeremy Cronin, who is also the deputy minister of public works.

The SACP argument is that the EPWP should be seen less as a “conveyor belt” into normal employment – and more like a way to ensure that “livelihoods are not entirely dependent on finding willing capitalist buyers of labour power”.

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